In a closely-watched case, the Supreme Court of the State of Washington held today that statutes of limitation do not apply in arbitration. Broom v. Morgan Stanley DW, Inc., No. 82311-1 (Sup. Ct. Wa. July 22, 2010). In that case, an NASD arbitration panel dismissed investors’ garden-variety suitability claims against their brokers on state statute of limitations grounds. The investors moved to vacate the award, and the case ended up in the highest court. The Court first reaffirmed that “facial legal error” is one instance in which arbitrators exceed their powers and thus is a valid ground for vacatur of an arbitration award under its state arbitration statute. Next, the Court concluded that, as a matter of statutory interpretation, Washington’s statutes of limitation clearly applied only to “actions,” and arbitrations were not “actions” as contemplated by the state legislature. Thus, the Court vacated the arbitration award, permitting the investors to have their claims heard on the merits in a new arbitration.
(H.T. to Ed Pekarek for alerting me to this decision!)
Last 5 posts by Jill Gross
- Updates on current and former FINRA Dispute Resolution executives - December 15th, 2014
- Symposium at Cardozo Asking (and perhaps Answering) "Is Mediation a Sleeping Beauty? - October 15th, 2014
- PIABA Releases Study Criticizing Lack of Diversity of FINRA Arbitrator Pool - October 7th, 2014
- Linda Fienberg To Retire from FINRA Dispute Resolution - October 7th, 2014
- Second Circuit Holds Forum Selection Clause Trumps FINRA Arbitration Requirement - August 21st, 2014